"Why? As we’ve long argued, the systemic build-up of total market credit is so large, currently about $52 trillion, that its implosion will swamp the Fed’s attempts to inflate."

If necessary how hard will it be for the fed to create your projected number of 53 trillion dollars?

Let me show you.

$53,000,000,000,000.00 and then hit "ENTER" on their screen.

Done!

The extra trillion is for inflationary pureposes.

Didn't even break a sweat.

Again, from Bernanke's speach:

http://www.federalreserve.gov/boardd...

Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost. By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation."

And further from the same speech:

"If we do fall into deflation, however, we can take comfort that the logic of the printing press example must assert itself, and sufficient injections of money will ultimately always reverse a deflation."

And more:

A striking example from U.S. history is Franklin Roosevelt's 40 percent devaluation of the dollar against gold in 1933-34, enforced by a program of gold purchases and domestic money creation. The devaluation and the rapid increase in money supply it permitted ended the U.S. deflation remarkably quickly. Indeed, consumer price inflation in the United States, year on year, went from -10.3 percent in 1932 to -5.1 percent in 1933 to 3.4 percent in 1934.17 The economy grew strongly, and by the way, 1934 was one of the best years of the century for the stock market. If nothing else, the episode illustrates that monetary actions can have powerful effects on the economy, even when the nominal interest rate is at or near zero, as was the case at the time of Roosevelt's devaluation.

So you see one can have inflation in a deflationary environment.

They hired Bernanke because of his theories on deflation and how to address the accompanying problems associated with it. Just as Obama has hired Volker to regein in inflation in the future. If you choose to ignore the person who has his finger on the "create more money than god button" I believe it will be a regret you will carry for a long while.

Cheers